Short answer: under federal law, premiums for qualified mortgage insurance are treated as deductible home mortgage interest again for tax years beginning after December 31, 2025, so for 2026 returns of calendar-year filers, if you itemize and meet the conditions. They were not deductible for 2022 through 2025. The amount is reduced, and can be cut to zero, once adjusted gross income (AGI) is above $100,000 ($50,000 married filing separately). This page covers the federal statute and IRS documents only. It is general information, not legal, financial or tax advice; ask a tax professional or the IRS about your own return.
Does the deduction apply for your tax year?
| Tax year | Mortgage insurance premiums | Source |
|---|---|---|
| 2007 through 2021 | Treated as qualified residence interest, with the phase-out | 26 U.S.C. 163(h)(3)(E) and its end date amendments |
| 2022 through 2025 | Not deductible | 163(h)(3)(E)(iv); IRS Publication 936 (2025) |
| 2026 and later | Treated as qualified residence interest again, with the phase-out | Pub. L. 119-21, section 70108, adding 163(h)(3)(F)(i)(III) |
A 2006 law (Pub. L. 109-432) added the rule; Congress moved its end date eight times, the last to December 31, 2021 (amendment notes to 26 U.S.C. 163, LII, read October 30, 2026). IRS Publication 936 (2025), for use in preparing 2025 returns, says the itemized deduction for mortgage insurance premiums has expired and you can no longer claim it (IRS, page last reviewed April 30, 2026). A law signed July 4, 2025 (Pub. L. 119-21, section 70108) says the end date in 163(h)(3)(E)(iv) does not apply for taxable years beginning after 2017, and that change applies to taxable years beginning after December 31, 2025 (163(h)(3)(F)(i)(III) and the effective date note). The IRS early release draft of Schedule A (Form 1040) for 2026, marked not for filing and created May 12, 2026, has a line 8d, “Mortgage insurance premiums” (IRS draft). The 2026 IRS document we found was that draft; Publication 936 was still the 2025 edition when we read it, so check the final 2026 Schedule A instructions.
Which premiums count
The statute treats premiums paid or accrued during the year for qualified mortgage insurance, in connection with acquisition indebtedness on a qualified residence, as qualified residence interest (163(h)(3)(E)(i)). Acquisition indebtedness is debt to buy, build or substantially improve the home; the general limit on that debt is $750,000 ($375,000 married filing separately), with higher limits for some older debt (163(h)(3)(F)(i)(II)). Qualified mortgage insurance means (163(h)(5)(E)):
- Mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration or the Rural Housing Service.
- Private mortgage insurance as defined in section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901).
Contracts issued before January 1, 2007 do not count (163(h)(3)(E)(iii)). Whether a given VA funding fee or USDA guarantee fee is mortgage insurance for this rule is a question for IRS guidance or a tax professional; Publication 936 (2025), in its section on points, lists VA funding fees and mortgage insurance premiums as charges that are not interest or points. See FHA mortgage insurance premiums, the VA home loan funding fee and how to remove private mortgage insurance.
Prepaid premiums
An amount paid for qualified mortgage insurance that is allocable to periods after the close of the tax year is treated as paid in those later periods, and no deduction is allowed for the unamortized balance if the mortgage is paid off before the end of its term. This does not apply to mortgage insurance provided by VA or the Rural Housing Service (163(h)(5)(F)). The Form 1098 instructions say Treasury regulation section 1.163-11 covers allocating prepaid premiums provided by FHA or private insurers (IRS, Rev. December 2026).
The income phase-out
The amount treated as interest is reduced, but not below zero, by 10 percent for each $1,000 ($500 married filing separately), or fraction of it, by which AGI is above $100,000 ($50,000 married filing separately) (163(h)(3)(E)(ii)). So above $109,000 of AGI ($55,000 married filing separately), nothing is left.
This example is only for the math, with example figures. Mortgage insurance of $150 a month on acquisition debt is $1,800 for the year, paid monthly, and the filer is not married filing separately.
| AGI | Amount over $100,000 | $1,000 steps (a fraction counts as one) | Reduction | Treated as interest |
|---|---|---|---|---|
| $100,000 | $0 | 0 | 0% | $1,800 − 0% = $1,800 |
| $100,001 | $1 | 1 | 10% | $1,800 − 10% = $1,620 |
| $104,500 | $4,500 | 5 | 50% | $1,800 − 50% = $900 |
| $109,000 | $9,000 | 9 | 90% | $1,800 − 90% = $180 |
| $109,001 | $9,001 | 10 | 100% | $1,800 − 100% = $0 |
Whether itemizing helps depends on your whole return, including the standard deduction; this page does not compute that.
Where it shows on Form 1098
The Form 1098 instructions (Rev. December 2026), to be used for 2026 information filed in early 2027, say the lender reports mortgage insurance premiums of $600 or more received during the year, but only if 163(h)(3)(E) applies, and that box 5 shows the total premiums paid for the tax year, including prepaid premiums, for qualified mortgage insurance; the $600 test applies mortgage by mortgage (IRS). The law that brings the deduction back is in 26 U.S.C. 163; the lender reporting rule is in 26 U.S.C. 6050H (LII). If box 5 is blank, your premiums may be under $600 or not reported; check your escrow statement and ask the servicer. See the mortgage interest statement (Form 1098).
Questions to ask a tax professional
- Does my mortgage insurance count as qualified mortgage insurance, and was the contract issued after 2006?
- Is my loan acquisition debt, and how much of it is within the limit?
- How much of an upfront or single premium is allocated to this year?
- How does the phase-out apply at my AGI and filing status?
- Is itemizing better than the standard deduction for me this year?
Checklist
- Find box 5 on each Form 1098 you receive for 2026.
- Keep your closing papers showing any upfront or single premium.
- Keep your year-end escrow statement showing premiums paid.
- Check the final IRS Schedule A instructions for 2026 before you file.
You can submit a complaint about a mortgage servicer at consumerfinance.gov/complaint.
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Sources
- 26 U.S.C. 163: Interest (see 163(h), personal interest)
- IRS: Publication 936 (2025), Home Mortgage Interest Deduction
- IRS: Schedule A (Form 1040) 2026, early release draft, not for filing (created May 12, 2026, PDF)
- IRS: Instructions for Form 1098 (Rev. December 2026, PDF)
- Cornell LII: 26 U.S. Code 6050H, Returns relating to mortgage interest received in trade or business from individuals
- CFPB: Submit a complaint
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.